Join me
as we travel the country
and explore licensing
to see what it means
for the everyday worker.
I'm Dick Carpenter
and this License to Work.
Occupational licenses are often justified out of concern
for public health and safety.
Restaurant cooks are almost entirely unlicensed.
Yet public health and safety implications
of preparing food
for paying customers are pretty obvious.
Why are cooks unlicensed?
Because there's a different way
to protect health and safety
that's just as effective
but not nearly as restrictive as licensing.
Inspections
To ensure public health and safety,
municipalities routinely inspect restaurants
instead of imposing onerous licensing on
food preparers, waitstaff, and dishwashers.
This more effective and efficient alternative
to licensing is not limited to restaurants.
Many licensed occupations
could also be regulated by far less restrictive means
while still protecting public health and safety.
In fact
there's a whole menu of alternatives to licensing.
These range from market mechanisms
involving no direct government intervention,
to regulatory alternatives that,
though they involve government,
do not stand as barriers to entering occupations
as licensing does.
Here are some of the more prominent ones.
The first and least restrictive
is market regulation.
Until recently
the city of Savannah, Georgia
required that one have a
government-issued tour guide license
to tell tourists
the famous Mercer house
was never actually owned by
songwriter Johnny Mercer,
or to show them or a wise person once observed
life is like a box of chocolates.
The license required aspiring guides to pass a test,
pay a fee,
pass a physical examination,
and pee in a cup
as part of a criminal background check.
But most tourist didn't know,
and likely didn't even care,
whether their tour guide was licensed...
tour guides like Savannah Dan who's leading a tour.
Hi, Dan!
Hey, welcome to Savannah.
Thank you.
So it's the most important quality in a tour guide?
Whether he's entertaining or interesting.
Precisely!
A tour guides license isn't going to tell you
whether a tour guides entertaining or not.
But hundreds, if not thousands, of reviews
of satisfied customers will.
Right.
Consumer reviews offer a wealth of information
about providers reputations
in a wide range of occupations.
Consumers use this information to weed out
businesses that fail to provide safe or quality service.
Companies with poor reputations either improve or
go out of business.
But some services are harder for consumers to judge.
Take auto maintenance.
Here a consumer or employer
might want some insurance
the mechanics know what they're doing.
For that there's voluntary private certification
which has worked effectively for years
in the auto maintenance industry.
This alternative signals to consumers and employers
that a mechanic has a certain amount of education
and experience.
It does so without creating
barriers to entry
or stymieing consumer choice
because it allows for freedom of occupational practice.
Anyone is free to work without a certificate
and consumers can choose whether certification
matters to them.
The next alternatives have
some form of government involvement.
As we discussed earlier
inspections are pretty common but
mandatory bonding or insurance
is another.
We've come here to an auction
to talk to an expert.
Wooden statue
painted by Mandy Warhol
*Auctioneer gibberish*
Excuse me!
80 to the man with the question.
How would you describe
mandatory bonding or insurance?
Glad you asked sir
B and I allows consumers
to get their money back for their damages
90 now 95
*Auctioneer gibberish*
Some states use B and I in lieu of licensing.
*Auctioneer gibberish*
California relies upon bonding
even though 29 states force us to be licensed.
*Auctioneer gibberish*
Bonding protects you, sir,
but allows us to be free from the
burdens of licensing.
In other words
bonding or insurance are often better
options than licensing.
Yes, sir
and sold it to the man asking all the questions.
Even jobs like this
can be regulated with alternatives to licensing.
Sometimes consumers fear
that they'll be harmed by fly-by-night providers
that is people who promise to start a service,
and maybe even start a service,
but then skip town with the dough.
This risk can be addressed through registration
such as what Kansas requires of roofing contractors.
With registration, service providers must notify
state officials of their name and contact information
before they can begin work.
The simple act of registering with a state ensures
that service providers can be found if necessary.
The idea of registration may also deter bad actors.
A final alternative is state certification,
such as certified interior designer.
This is like private certification
except under state certification
the certifying body is a government
rather than a private organization.
Shiplap on the left walls.
Under state certification, like private certification,
anyone is free to practice in an occupation.
Let's do subway tiles on the backsplash.
The key difference is that under state certification
only those who have
completed prescribed requirements are
allowed to use a designated title.
California for instance restricts the
use of the title certified interior designer
only to those who have completed
several years of schooling and apprentices
and passed an examination.
Licensing is the most restrictive form
of occupational regulation.
It should only be used
when no other tool will do.
When there's real proof of harm
that can't be mitigated by a less restrictive option.
Too often occupational regulation
results from economic protectionism
from special interests trying to use
government power to shut down competition.
And that leads to a host of ills
from fewer jobs to higher prices
and it tramples on the fundamental American right
to earn an honest living.
Instead lawmakers should demand evidence.
They should only impose regulation
upon proof of a real problem
and even then
they should look for the least burdensome
most targeted tool to solve that problem.
Click on the report icon to read more
about alternatives to licensing.